Is That College Scholarship Legit? Here’s How to Spot the Scammy Ones

College scholarships
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Student loans are rough.

Over the past two decades the cost of college tuition has increased by more than double the national inflation rate, and undergraduate students are graduating with an average of $30,000 in student loan debt.

With 3,000 people defaulting on their loans daily, students are waking up to the burden of student loans and are looking at scholarships to offset their college costs.

That means more scammers looking to capitalize on unsuspecting students, including this one, who spent an entire year applying for “sweepstakes” scholarships only to have her information used to spam her.

With more than 1.5 million scholarships available, it’s important to know what to look for to avoid scams that take your money dishonestly or sell your information.

Tips for Spotting Scholarship Scams

The most commonly talked-about scholarship scams advertise exclusive information about awards and charge a modest fee for their expertise. They’ll usually approach you directly via mail, email or advertisements.

Be on the lookout for these types of scams:

  • Scholarships with an “application” or “processing” fee.
  • Free seminars offering advice on financial aid. These are often high-pressure sales pitches on investment, annuity and insurance products.
  • Reward without entry, like a postcard or email that says you’ve won a scholarship you didn’t apply for.

The Federal Trade Commission says to be wary of phrasing like:

  • “The scholarship is guaranteed or your money back.”
  • “You can’t get this information anywhere else.”
  • “We’ll do all the work, you just pay the processing fee.”
  • “The scholarship will cost some money.”

If you find any scholarship scams during your searches, you can report them to the Federal Trade Commission and your state Attorney General.

Even reputable sites let sketchy scholarships fall through the cracks, so know what you’re looking for to avoid the hassle of an overflowing inbox and voicemail by following these tips.

  • Look for grammatical and spelling errors; if it looks like a bad translation, it probably is.
  • Click around through the rest of the website. Does the rest of the site provide good information or is it also poorly translated?
  • Genuine scholarships will always have a phone number and business address; it should not be a P.O. box.
  • Check the company’s social media. Is it updated consistently? Does it post its own content? Is it posting about the scholarship?
  • Some legitimate scholarships will ask you to send your application via email; make sure you’ve researched the legitimacy of the site before sending any personal information.

Remember you must fill out the Free Application for Federal Student Aid (FAFSA) every year you plan on needing federal financial aid. Don’t waste your hard-earned money (or your parent’s money) to have this or any application filled out for you.

And if you’re looking for legit scholarships to apply for, then check out our massive list of 100 college scholarships — you’re bound to find the help you need!

Jen Smith is an editorial intern at The Penny Hoarder and the blogger behind Saving with Spunk. After paying off $53K of student loan debt, she wishes she’d applied for a few more scholarships.